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GLOBALNET XXXXXXXXX.XXX, INC.
and
THE BANK OF NEW YORK, as Rights Agent
RIGHTS AGREEMENT
Dated as of July 19, 2001
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TABLE OF CONTENTS
Page
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RIGHTS AGREEMENT .................................................................................... 1
Section 1. Certain Definitions. .................................................................... 2
Section 2. Appointment of Rights Agent. ............................................................ 8
Section 3. Issue of Right Certificates. ............................................................ 8
Section 4. Form of Right Certificates. ............................................................. 11
Section 5. Countersignature and Registration. ...................................................... 11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates. .................................................. 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. .......................... 14
Section 8. Cancellation of Right Certificates. ..................................................... 16
Section 9. Availability of Preferred Shares. ....................................................... 16
Section 10. Preferred Shares Record Date. .......................................................... 17
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. .................... 18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. ............................ 32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. .................. 33
Section 14. Fractional Rights and Fractional Shares. ............................................... 35
Section 15. Rights of Action. ...................................................................... 37
Section 16. Agreement of Right Holders. ............................................................ 38
Section 17. Right Certificate Holder Not Deemed a Stockholder. ..................................... 39
Section 18. Concerning the Rights Agent. ........................................................... 39
Section 19. Merger or Consolidation or Change of Name of Rights Agent. ............................. 40
Section 20. Duties of Rights Agent. ................................................................ 41
Section 21. Change of Rights Agent. ................................................................ 46
Section 22. Issuance of New Right Certificates. .................................................... 47
Section 23. Redemption. ............................................................................ 48
Section 24. Exchange. .............................................................................. 49
Section 25. Notice of Certain Events. .............................................................. 51
Section 26. Notices. ............................................................................... 52
Section 27. Supplements and Amendments. ............................................................ 53
Section 28. Successors. ............................................................................ 54
Section 29. Benefits of this Agreement. 54
Section 30. Severability. .......................................................................... 55
Section 31. Governing Law. ......................................................................... 55
Section 32. Counterparts. .......................................................................... 56
Section 33. Descriptive Headings. .................................................................. 56
Section 34. Administration. ........................................................................ 56
Section 35. The Merger Agreement, Etc. ............................................................. 56
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Exhibit A - Form of Certificate of Designation, Preferences
and Rights of Series A Junior Participating Preferred Stock
Exhibit B - Form of Certificate of Designation, Preferences
and Rights of Series B Junior Participating Preferred Stock
Exhibit C - Form of Right Certificate
Exhibit D - Form of Right Certificate
Exhibit E - Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
Agreement, dated as of July 19, 2001, between GlobalNet
Xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and The Bank of New
York, a New York banking corporation, as Rights Agent (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Common Right") for
each Common Share (as hereinafter defined) of the Company and one preferred
share purchase right (a "Class A Right" and together with the Common Rights, the
"Rights") for each Class A Common Share (as hereinafter defined, and, together
with the Common Shares, the "Shares") outstanding at the Close of Business (as
hereinafter defined) on July 13, 2001 (the "Record Date"), each Common Right for
each Common Share representing the right to purchase one one-hundredth of a
Series A Preferred Share (as hereinafter defined), upon the terms and subject to
the conditions herein set forth and each Class A Right for each Class A Common
Share representing the right to purchase one one-thousandth of a Series B
Preferred Share (as hereinafter defined, collectively, with the Series A
Preferred Shares, the "Preferred Shares") upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
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SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the combined voting power of the Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary (as such
term is hereinafter defined) of the Company, any employee benefit plan of
the Company or any Subsidiary of the Company, or any entity holding Shares
of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
combined voting power of the Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of
15% or more of the combined voting power of the Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional Shares of the Company, then such Person shall be deemed to be
an "Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of Shares so
that such Person would no longer be an "Acquiring
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Person," as defined pursuant to the foregoing provisions of this paragraph
(a), then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however,
that a
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Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Owner to the contrary, the phrase "then outstanding," when used with
reference to a Person's beneficial ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
Notwithstanding the foregoing, none of the Company's directors
or officers shall be deemed to be the Beneficial Owner of, or to
beneficially own, any Shares of the Company owned by any other
director or officer of the
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Company solely by virtue of such persons acting in their capacities
as such, including, without limitation, in connection with any
formulation and publication of the Board of Directors'
recommendation of a position, and any actions taken in furtherance
thereof, with respect to any acquisition proposal relating to the
Company, a tender or exchange offer for any Shares of the Company or
any solicitation of proxies with respect to any Shares of the
Company.
Notwithstanding anything contained in this Agreement to the
contrary, neither SPARK, Sub nor any of their Affiliates or
Associates shall be deemed to be the Beneficial Owner of, nor to
beneficially own, any of the Shares of the Company solely by virtue
of the approval, execution or delivery of the Merger Agreement.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
(e) "Class A Rights" shall mean one preferred share purchase right
for Class A Common Share of the Company.
(f) "Class A Common Shares" when used with reference to the Company
shall mean the shares of Class A Common Stock (counted at 1/10th vote per share
of the Common Shares), par value $.001 per share of the Company.
(g) "Class A Common Share Purchase Price" shall have the meaning set
forth in Section 7(b) hereof.
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(h) "Close of Business" on any given date shall mean 5:00 p.m. New
York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m. New York time, on the next succeeding
Business Day.
(i) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.001 per share, of the
Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(j) "Common Rights" shall mean one preferred share purchase right
for each Common Share of the Company.
(k) "Common Share Purchase Price" shall have the meaning set forth
in Section 7(b) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Merger" shall mean the merger of Sub with and into the Company
in accordance with the Delaware General Corporation Law upon the terms and
subject to the conditions set forth in the Merger Agreement, whereupon the
Company will become the surviving entity and shareholders of the Company
will receive cash as merger consideration.
(o) "Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of June 15, 2001, by and among Sub, SPARK and the Company, as
amended July 17,
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2001, as the same shall be amended from time to time in accordance with
the Merger Agreement.
(p) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(q) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Series A Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Designations, Preferences and Rights of Series A Junior Participating
Preferred Stock, a copy of which is attached to this Agreement as Exhibit
A.
(s) "Series B Preferred Shares" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.001 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Designations, Preferences and Rights of Series B Junior Participating
Stock, a copy of which is attached to this Agreement as Exhibit B.
(t) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(u) "SPARK" shall mean New Media SPARK plc, a company organized
under the laws of England and Wales.
(v) "Sub" shall mean GlobalNet Acquisitions, Inc., a Delaware
corporation and a wholly-owned subsidiary of SPARK.
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(w) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Shares for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
Shares for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming an
Acquiring Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of
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Section 3(b) hereof) by the certificates for Shares of the Company registered in
the names of the holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Shares of the Company. The Company shall give the Rights Agent
prompt written notice of the Distribution Date. As soon as practicable after the
Distribution Date, and receipt by the Rights Agent of written notice of the
Distribution Date from the Company, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Shares of the Company as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially the form of
Exhibit C hereto (a "Right Certificate"), evidencing one Common Right for each
Common Share of the Company so held and evidencing one Class A Right for each
Class A Common Share of the Company so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit D hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Shares of the
Company as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Shares of the Company outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the Redemption Date or
the Final Expiration Date), the surrender for transfer of any certificate for
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Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Shares of the Company represented thereby.
(c) Certificates for Shares of the Company which become outstanding
(including, without limitation, reacquired Shares of the Company referred to in
the last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between GlobalNet
Xxxxxxxxx.xxx, Inc. and The Bank of New York dated as of July 19, 2001
(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of GlobalNet Xxxxxxxxx.xxx, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. GlobalNet Xxxxxxxxx.xxx, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void.
The Company shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall supply the Rights Agent with such legended Right
Certificates. With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Shares of the
Company represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Shares of the Company
represented thereby. In the event that the Company purchases or acquires any
Shares of the Company after the Record Date but prior to the Distribution Date,
any Right associated with such Shares of the Company shall
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be deemed cancelled and retired so that the Company shall not be entitled to
exercise any Right associated with the Shares of the Company which are no longer
outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit C and
Exhibit D hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. The Rights Certificates shall be in a machine printable format and in a
form reasonably satisfactory to the Rights Agent. Subject to the provisions of
Section 22 hereof, the respective Right Certificates shall entitle the holders
of Common Shares thereof to purchase such number of one one-hundredths of a
Series A Preferred Share as shall be set forth therein at the Common Share
Purchase Price, but the number of such one one-hundredths of a Series A
Preferred Share and the Common Share Purchase Price shall be subject to
adjustment as provided herein; and the respective Rights Certificate shall
entitle the holders of Class A Common Shares thereof to purchase such number of
one one-thousandths of a Series B Preferred Share as shall be set forth therein
at the Class A Common Share Purchase Price, but the number of such one
one-thousandths of a Series B Preferred Share and the Class A Common Share
Purchase Price shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief
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Executive Officer, its President, any of its Vice Presidents or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal corporate trust office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier
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of the Redemption Date or the Final Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder thereof to purchase a like number of one one-hundredths of a
Series A Preferred Share or one one-thousandths of a Series B Preferred Share,
as applicable, as the Right Certificate or Right Certificates surrendered then
entitled such holder of Rights. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal corporate trust office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment, by the holder of the Right
Certificate, of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate, if mutilated, the Company will make and deliver a new
Right Certificate of like tenor
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to the Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) The registered holder of any Right Certificate may, subject to the
second paragraph of Section 11(a)(ii) and (a)(iii), exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal corporate trust office of the Rights Agent,
together with payment of the Common Share Purchase Price for each one
one-hundredth of a Preferred Share as to which Common Rights are exercised with
respect to the Common Shares and for the payment of the Class A Common Share
Purchase Price for each one one-thousandth of a Series B Preferred Share as to
which the Class A Rights are exercised with respect to the Class A Common
Shares, at or prior to the earliest of (i) the Close of Business on July 11,
2011 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof, (iv)
immediately prior to the conversion of Shares pursuant to the Merger Agreement
or (v) immediately prior to the Effective Time (as defined in the Merger
Agreement) of the Merger, whereupon the Rights shall expire.
(b) The Common Share Purchase Price for each one one-hundredth of a
Series A Preferred Share purchasable pursuant to the exercise of a Common Right
shall initially be $0.75 (the "Common Share Purchase Price"), and the Class A
Common Share Purchase Price for each one one-thousandth of a Series B Preferred
Share purchasable pursuant to the exercise of a Class A Common Right shall
initially be $0.075 (the "Class A Common Share Purchase Price", and
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collectively with the Common Share Purchase Price, the "Purchase Price") and
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by wire transfer, certified
check, cashier's check, official bank check or money order payable to the order
of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Series A Preferred Share for each Common Right and such
number of one one-thousandths of a Series B Preferred Share for each Class A
Common Right as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate.
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(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section 14
hereof.
SECTION 8. CANCELLATION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company.
SECTION 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
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The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
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receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares or other
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation, other than the
Merger), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid
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upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a Common Right shall
thereafter have a right to receive, upon exercise thereof at a price equal
to the then current Common Share Purchase Price multiplied by the number
of one one-hundredths of a Series A Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in
lieu of Series A Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then
current Common Share Purchase Price by the number of one one-hundredths of
a Series A Preferred Share for which a Common Right is then exercisable
and dividing that product by (y) 50% of the then current per share market
price of the Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event; provided, however,
that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii). In the event that any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate
or diminish the benefits intended to be afforded by the Rights.
(iii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a Class A Right shall
thereafter have a right to receive, upon exercise thereof at a price equal
to the then current Class A Common Share Purchase Price multiplied by the
number of one one-thousandths of a Series B Preferred
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Share for which a Class A Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Series B Preferred Shares, such
number of Class A Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Class A Common Share Purchase
Price by the number of one one-thousandths of a Series B Preferred Share
for which a Class A Right is then exercisable and dividing that product by
(y) 50% of the then current per share market price of the Company's Class
A Common Shares (determined pursuant to Section 11(d) hereof) on the date
of the occurrence of such event; provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(iii). In the event that any Person
shall become an Acquiring Person and the applicable Rights shall then be
outstanding, the Company shall not take any action which would eliminate
or diminish the benefits intended to be afforded by the applicable Rights.
From and after the time any person becomes an Acquiring Person, any
of the applicable Rights that are or were acquired or beneficially owned
by any Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have
no right to exercise such Rights under any provision of this Agreement. No
Right Certificate shall be issued pursuant to Section 3 that represents
Rights beneficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate
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or Affiliate thereof or to any nominee of such Acquiring Person, Associate
or Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iv) In the event that there shall not be sufficient Shares of the
Company issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraphs (ii) and (iii), the Company shall take all such action as
may be necessary to authorize additional Shares of the Company for
issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Shares of the Company, the Company
shall substitute, for each Share of the Company that would otherwise be
issuable upon exercise of any Right, a number of Preferred Shares or
fraction thereof such that the current per share market price of one
Series A Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share of the Company as
of the date of issuance of such Preferred Shares or fraction thereof and
the current per share market price of one Series B Preferred Share
multiplied by such number or fraction is equal to the current per share
market price of one Class A Common Share of the Company as of the date of
issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares
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("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Preferred Shares
(as defined in Section 11(d) hereof) on such record date, the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in
a consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Preferred Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation.
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Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which
shall be such current per share market price of the Preferred Shares;
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
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made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) which fall
within the one-year period ending on such date and have the lowest such
average; provided, however, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of thirty (30) Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading
or, if the
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Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading
or, if the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by
the Board of Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of
the Preferred Shares shall be conclusively deemed to be the current per
share market price of the Common Shares of the Company as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof), multiplied by, in the case of Series A Preferred Shares, one
one-hundred and in the case of Series B Preferred Shares, one
one-thousand. If neither the Shares of the Company nor the Preferred
Shares are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith by
the Board of Directors of the
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Company, whose determination shall be described in a statement filed with
the Rights Agent.
(e) No adjustment in the Common Share Purchase Price or the Class A
Common Share Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Common Share
Purchase Price or the Class A Common Share Purchase Price respectively;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth
of a Preferred Share or one ten-thousandth of any other share or security
as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the right
to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
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(g) (i) All Common Rights originally issued by the Company
subsequent to any adjustment made to the Common Share Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Common
Share Purchase Price, the number of one one-hundredths of a Series A
Preferred Share purchasable from time to time hereunder upon exercise of
the Common Rights, all subject to further adjustment as provided herein;
and (ii) All Class A Rights originally issued by the Company subsequent to
any adjustment made to the Class A Common Share Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Common Share
Purchase Price, the number of one one-thousandths of a Series B Preferred
Share purchasable from time to time hereunder upon exercise of the Class A
Rights, all subject to further adjustment as provided herein
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each Common Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Series A Preferred Share
(calculated to the nearest one one-millionth of a Series A Preferred
Share) obtained by (A) multiplying (x) the number of one one-hundredths of
a share covered by a Common Right immediately prior to this adjustment by
(y) the Common Share Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) dividing the product so obtained
by the Common Share Purchase Price in effect immediately after such
adjustment of the Common Share Purchase Price and (ii) each Class A Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Class A Common
Share Purchase Price, that number
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of one one-thousandths of a Series B Preferred Share (calculated to the
nearest one one-millionth of a Series B Preferred Share) obtained by (A)
multiplying (x) the number of one one-hundredths of a share covered by a
Class A Right immediately prior to this adjustment by (y) the Class A
Common Share Purchase Price in effect immediately prior to such adjustment
of the Class A Common Share Purchase Price and (B) dividing the product so
obtained by the Class A Common Share Purchase Price in effect immediately
after such adjustment of the Class A Common Share Purchase Price
(i) The Company may elect on or after the date of any adjustment of
the Common Share Purchase Price to adjust the number of Common Rights, in
substitution for any adjustment in the number of one one-hundredths of a
Series A Preferred Share purchasable upon the exercise of a Common Right.
Each of the Rights outstanding after such adjustment of the number of
Common Rights shall be exercisable for the number of one one-hundredths of
a Series A Preferred Share for which a Common Right was exercisable
immediately prior to such adjustment. The Company may elect on or after
the date of any adjustment of the Class A Common Share Purchase Price to
adjust the number of Class A Rights, in substitution for any adjustment in
the number of one one-thousandths of a Series B Preferred Share
purchasable upon the exercise of a Class A Right. Each of the Class A
Rights outstanding after such adjustment of the number of Class A Rights
shall be exercisable for the number of one one-thousandths of a Series B
Preferred Share for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the applicable Purchase
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Price by the Purchase Price in effect immediately after adjustment of the
applicable Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public
announcement.
(j) (i) Irrespective of any adjustment or change in the Common Share
Purchase Price or the number of one one-hundredths of a Series A Preferred
Share issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Common Share
Purchase Price and the number of one one-hundredths of a Series A
Preferred Share which were expressed in the initial Right
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Certificates issued hereunder and (ii) irrespective of any adjustment or
change in the Class A Common Share Purchase Price or the number of one
one-thousandths of a Class B Preferred Share issuable upon the exercise of
the Class A Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Common A Common Share Purchase Price
and the number of one one-thousandths of a Series B Preferred Share which
were expressed in the initial Right Certificates issued hereunder
(k) (i) Before taking any action that would cause an adjustment
reducing the Common Share Purchase Price below one one-hundredth of the
then par value, if any, of the Series A Preferred Shares issuable upon
exercise of the Common Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Series
A Preferred Shares at such adjusted Common Share Purchase Price and (ii)
before taking any action that would cause an adjustment reducing the Class
A Common Share Purchase Price below one one-thousandth of the then par
value, if any, of the Series B Preferred Shares issuable upon exercise of
the Class A Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Series B Preferred
Shares at such adjusted Class A Common Share Purchase Price
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
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Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay
any dividend on the Shares of the Company payable in Shares of the Company
or (ii) effect a subdivision, combination or consolidation of the Shares
of the Company (by reclassification or otherwise than by payment of
dividends in Shares of the Company) into a greater or lesser number of
Shares of the Company, then in any such case (A) the number of one
one-hundredths of a Series A Preferred Share purchasable after such event
upon proper exercise of each Common Right shall be determined by
multiplying the number of one one-hundredths of
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a Series A Preferred Share purchasable after such event upon proper
exercise of each Common Right shall be determined by multiplying the
number of one one-hundredths of a Series A Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is
the number of Common Shares of the Company outstanding immediately before
such event and the denominator of which is the number of Common Shares of
the Company outstanding immediately after such event, (B) the number of
one one-thousandths of a Series B Preferred Share purchasable after such
event upon proper exercise of each Class A Right shall be determined by
multiplying the number of one one-thousandths of a Series B Preferred
Share so purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Class A Common Shares of the Company
outstanding immediately before such event and the denominator of which is
the number of Class A Common Shares of the Company outstanding immediately
after such event, and (C) each Share of the Company outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each Share of the Company outstanding immediately
prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(o) In the event that the Class A Shares are converted into Common
Shares pursuant to the Company's certificate of incorporation, all Class
A Rights shall automatically convert into Common Rights at a rate of 1 to
10.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and
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with each transfer agent for the Shares of the Company or the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (other than Rights which have become void
pursuant to Section 11(a)(ii) hereof) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Common
Share Purchase Price multiplied by the number of one one-hundredths of a Series
A Preferred Share for which a Common Right is then exercisable and the then
current Class A Common Share Purchase Price multiplied by the number of one
one-thousandths of a Series B Preferred Share for which a Class A Right is then
exercisable, in
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accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of common shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Common Share Purchase Price by the
number of one one-hundredths of a Series A Preferred Share for which a Common
Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer and as shall equal the result by
(C) multiplying the then current Class A Common Share Purchase Price by the
number of one one-thousandths of a Series B Preferred Share for which a Class A
Right is then exercisable and dividing that product by (D) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares to permit the exercise in full of all outstanding Rights in
accordance with this Agreement) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares and Class A
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The
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Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such
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other system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Series A Preferred Share or one one-thousandth of a Series B
Preferred Share) upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Series A Preferred Share or one
one-thousandth of a Series B Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Series A Preferred Share or one
one-thousandth of a Series B Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Series A Preferred Share or one one-thousandth of a
Series B Preferred Share, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a
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Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Shares of the Company); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Shares of the Company), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Shares of the Company), may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
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SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares
of the Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share or Class A Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Share or Class A Common Share
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation;
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provided that the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent such compensation as shall be agreed in writing between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred by the Rights Agent in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, obligation, damage or expense
(including reasonable attorneys' fees and expenses and other professional
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services) (collectively, "Losses"), incurred without gross negligence or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of defending
against any claim (whether asserted by the Company, a holder of Rights or any
other Person) of liability in the premises.
The Rights Agent shall be protected and shall incur no liability and
shall be indemnified for and held harmless against any and all Losses for, or in
respect of, any action taken, suffered or omitted by it in connection with, its
administration of this Agreement (i) in reliance upon any Right Certificate or
certificate for the Preferred Shares or Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed and executed by
the proper person or persons, and where necessary, verified or acknowledged or
(ii) otherwise upon the advice of counsel as set forth in Section 20 hereof.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect, punitive or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. The provisions of this Section 18
shall survive the expiration of the Rights and the termination of this
Agreement.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation or other Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation or other Person resulting from any merger or consolidation to
which the Rights Agent or any
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successor Rights Agent shall be a party, or any corporation or other Person
succeeding to all or substantially all of the stock transfer or corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, that such corporation or other Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or
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obligations shall be read into this Agreement against the Rights Agent, upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with or in reliance on such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering
or omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate in form
reasonably satisfactory to the Rights Agent signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken, suffered or
omitted to be taken in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence or willful misconduct;
provided, however, that the Rights Agent shall not be liable for any
indirect, special, consequential or punitive damages.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its
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countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in this
Agreement, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it be responsible for any
determination of the market value of the Rights or any Shares of the
Company pursuant to the provisions hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Preferred
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable, nor shall the Rights Agent be responsible for the legality
of the terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other
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acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken, or suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall
not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the
date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or
the effective date in the case of an omission), the Rights Agent shall
have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may
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be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase (as the case may be)
has not been completed, the Rights Agent shall not take any further action
with respect to such requested purchase or transfer without first
consulting with the Company.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action
taken or omitted by it in connection with its administration of this
Agreement if such acts or omissions are in reliance upon (i) the proper
execution of the certification concerning beneficial ownership appended to
the form of assignment and the form of election to purchase attached
hereto unless the Rights
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Agent shall have actual knowledge that, as executed, such certification is
untrue, or (ii) the non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or
transfer of the Right Certificates.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days notice in writing mailed to the Company. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
(30) days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit such holder's Right
Certificate for inspection by the Company), then the Rights Agent or the
registered holder, of any Right Certificate may at the expense of the Company
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (i) a corporation organized and doing business under the laws of
the United States or of any state of the United States so long as such
corporation is authorized to do business as a banking institution under such
laws, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to
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supervision or examination by federal or state authorities and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (ii) an affiliate of an institution that satisfies the
requirements set forth in clause (i) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall,upon payment of its
charges hereunder, deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Shares
of the Company or Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to appoint a successor
Rights Agent or to give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
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SECTION 23. REDEMPTION. (a) The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.001 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Shares of the Company. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24
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hereof, and other than in connection with the purchase of Shares of the Company
prior to the Distribution Date.
SECTION 24. EXCHANGE. (a) The Board of Directors of the Company may,
at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) and (a)(iii) hereof) for Shares of the Company at an exchange ratio of
one Common Share per Common Right and one Class A Common Share per Class A
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary or any entity
holding Shares of the Company for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the voting power of the Shares of the Company
then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Shares of the Company equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such
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exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Shares of the Company for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Sections 11(a)(ii)
and (a)(iii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Shares of the
Company issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Shares of the Company for issuance upon exchange of the Rights. In the event the
Company shall, after good faith effort, be unable to take all such action as may
be necessary to authorize such additional Shares of the Company, the Company
shall substitute, for each Share of the Company that would otherwise be issuable
upon exchange of a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share market price of one
Share of the Company as of the date of issuance of such Preferred Shares or
fraction thereof.
(d) The Company shall not be required to issue fractions of Shares
of the Company or to distribute certificates which evidence fractional Shares of
the Company. In lieu of such fractional Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Shares of the Company would otherwise be
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issuable an amount in cash equal to the same fraction of the current market
value of a whole Share of the Company. For the purposes of this paragraph (d),
the current market value of a whole Share shall be the closing price of a Share
of the Company (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Shares of the Company payable in Shares of the Company or to
effect a subdivision, combination or consolidation of the Shares of the Company
(by reclassification or otherwise than by payment of dividends in Common Shares
of the Company), then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale,
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transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Shares of the Company and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the Shares of the Company
and/or Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
GlobalNet Xxxxxxxxx.xxx, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxx Xxxxxx
52
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With a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxxx X. X'Xxxxxx
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time and the Rights Agent shall, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions with respect to the Rights which the Company may
deem necessary or desirable, any such supplement or amendment to be evidenced by
a writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person,
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57
this Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of Rights (other than any Acquiring Person and its
Affiliates and Associates). Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to (a) lower the thresholds set forth in Sections 1(a) and 3(a) hereof
from 15% to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Shares of the Company then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, any entity holding Shares of the Company for or
pursuant to the terms of any such plan or any Person who is not deemed an
Acquiring Person) and (ii) 10%, (b) fix a Final Expiration Date later than the
date set forth in Section 7 hereof, (c) reduce the Redemption Price or (d)
increase the Purchase Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Agreement, the Rights Agent
shall execute such supplement or amendment. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 27 which alters the Rights Agent's rights or
duties.
SECTION 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent
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58
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Shares of the Company) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Shares of the Company).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York. The parties hereto hereby waive the
right to a jury trial in any action arising out of this Agreement. Any dispute
arising out of this Agreement shall be litigated in the borough of Manhattan,
New York City, New York, and the parties hereby submit to the jurisdiction of
such courts and acknowledge that such courts are a convenient forum.
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59
SECTION 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 34. ADMINISTRATION. The Board of Directors of the Company
shall have the exclusive power and authority to administer and interpret the
provisions of this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company or as may be
necessary or advisable in the administration of this Agreement. All such
actions, calculations, determinations and interpretations which are done or made
by the Board of Directors of the Company in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and shall not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
SECTION 35. THE MERGER AGREEMENT, ETC. Notwithstanding anything in
this Agreement to the contrary, none of (a) the approval, execution and delivery
of the Merger Agreement, (b) the conversion of the Shares pursuant to the Merger
Agreement or (c) the acquisition by SPARK or Sub of Shares other than pursuant
to the Merger Agreement shall cause (i) SPARK or Sub or any of their Affiliates
or Associates to be an Acquiring Person, (ii) a Shares Acquisition Date to occur
or (iii) a Distribution Date to occur in accordance with the
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60
terms hereof, which Distribution Date, if any, shall be instead indefinitely
deferred until such time as the Board of Directors may otherwise determine.
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61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
GLOBALNET XXXXXXXXX.XXX, INC.
By /s/ Xxx X. Xxxxxx
----------------------
Name: Xxx X. Xxxxxx
Title: Chief Operating Officer
THE BANK OF NEW YORK
By /s/ Xxxxxxxx Xxxxxxx
-----------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
62
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
GLOBALNET XXXXXXXXX.XXX, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
------------------------------------
GlobalNet Xxxxxxxxx.xxx, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware at a meeting duly called and held on July 11, 2001:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation of the Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $.001 per share (the "Preferred Stock"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
"Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of this series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Junior Preferred Stock") and the number of shares constituting the
Series A Junior Preferred Stock shall be two hundred and fifty thousand
(250,000). Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series A Junior Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Junior Preferred Stock.
63
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and superior to the
Series A Junior Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Preferred Stock, in preference to the holders of Common
Stock, par value $.001 per share (the "Common Stock"), of the Corporation, and
of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Preferred Stock. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Junior Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends
A-2
64
shall not bear interest. Dividends paid on the shares of Series A Junior
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, in the Certificate of Incorporation of the Corporation or by law, the
holders of shares of Series A Junior Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Junior Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior Preferred
Stock;
A-3
65
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Preferred Stock, except dividends paid ratably on the Series A Junior
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (upon liquidation,
dissolution or winding up) to the Series A Junior Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Junior Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (upon liquidation, dissolution or
winding up) with the Series A Junior Preferred Stock, except distributions made
ratably on the Series A Junior Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
A-4
66
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Junior Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Junior Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Junior Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Junior Preferred Stock, voting together as a single class."
A-5
67
IN WITNESS WHEREOF, GlobalNet Xxxxxxxxx.xxx, Inc. has caused
this Certificate of Designations of Series A Junior Participating Preferred
Stock to be duly executed by its Secretary this 19th day of July, 2001.
GLOBALNET XXXXXXXXX.XXX, INC.
/s/ Xxx X. Xxxxxx
------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Operating Officer
A-6
68
Exhibit B
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES B JUNIOR PARTICIPATING
PREFERRED STOCK
of
GLOBALNET XXXXXXXXX.XXX, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
------------------------------------
GlobalNet Xxxxxxxxx.xxx, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware at a meeting duly called and held on July 11, 2001:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation of the Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $.001 per share (the "Preferred Stock"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
"Series B Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of this series
shall be designated as "Series B Junior Participating Preferred Stock" (the
"Series B Junior Preferred Stock") and the number of shares constituting the
Series B Junior Preferred Stock shall be fifty thousand (50,000). Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Series B Junior
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Junior Preferred Stock.
69
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and superior to the
Series B Junior Preferred Stock with respect to dividends, the holders of shares
of Series B Junior Preferred Stock, in preference to the holders of Class A
Common Stock, par value $.001 per share (the "Class A Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series B Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 1000 times the aggregate per
share amount of all cash dividends, and 1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Class A Common Stock or a subdivision of
the outstanding shares of Class A Common Stock (by reclassification or
otherwise), declared on the Class A Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Junior Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Class A Common Stock payable in shares of
Class A Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Class A Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Class A Common Stock) into a greater
or lesser number of shares of Class A Common Stock, then in each such case the
amount to which holders of shares of Series B Junior Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Class A Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Class A Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Junior Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the Class A
Common Stock (other than a dividend payable in shares of Class A Common Stock);
provided that, in the event no dividend or distribution shall have been declared
on the Class A Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1 per share on the Series B Junior Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be
B-2
70
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series B
Junior Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B
Junior Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Junior Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Class A Common Stock payable in shares of Class A Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Class A Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Class A Common Stock) into a greater
or lesser number of shares of Class A Common Stock, then in each such case the
number of votes per share to which holders of shares of Series B Junior
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Class A Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Class A Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, in the Certificate of Incorporation of the Corporation or by law, the
holders of shares of Series B Junior Preferred Stock and the holders of shares
of Class A Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series B Junior Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Class A Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B Junior
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Junior Preferred
Stock;
B-3
71
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Junior Preferred Stock, except dividends paid ratably on the Series B Junior
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series B Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Junior Preferred Stock, or any shares of
stock ranking on a parity with the Series B Junior Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series B Junior
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (upon liquidation,
dissolution or winding up) to the Series B Junior Preferred Stock unless, prior
thereto, the holders of shares of Series B Junior Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Junior Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Class A Common Stock, or (2) to
the holders of shares of stock ranking on a parity (upon liquidation,
dissolution or winding up) with the Series B Junior Preferred Stock, except
distributions made ratably on the Series B Junior Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the Class
A
B-4
72
Common Stock payable in shares of Class A Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Class A Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class A Common Stock) into a greater or lesser number of shares of Class A
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series B Junior Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Class A Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Class A Common
Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Class A Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case each
share of Series B Junior Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Class A Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Class A Common Stock payable in shares of Class A Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Class A Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Class A Common Stock) into a greater or lesser number
of shares of Class A Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series B Junior Preferred Stock shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Class A Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Class A Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series B Junior
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series B Junior Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series B Junior Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series B Junior Preferred Stock, voting together as a single class."
B-5
73
IN WITNESS WHEREOF, GlobalNet Xxxxxxxxx.xxx, Inc. has caused
this Certificate of Designations of Series B Junior Participating Preferred
Stock to be duly executed by its Secretary this 19th day of July, 2001.
GLOBALNET XXXXXXXXX.XXX, INC.
/s/ Xxx X. Xxxxxx
------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Operationg Officer
B-6
74
Exhibit C
Form of Right Certificate
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER JULY 11, 2011 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS OWNED BY ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) SHALL BECOME NULL AND VOID.
Right Certificate
GLOBALNET XXXXXXXXX.XXX, INC.
This certifies that _________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of July 19, 2001 (the "Rights Agreement"),
between GlobalNet Xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"),
and The Bank of New York (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Eastern time, on July 11, 2011 at the
principal corporate trust office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.001 per
share (the "Preferred Shares"), of the Company, at a purchase price of $0.75 per
one one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of July 13, 2001 based on the Preferred Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
75
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.001 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares or shares of the Company's Common Stock, par value $.001 per
share.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
C-2
76
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated: _____, ___ .
ATTEST: GLOBALNET XXXXXXXXX.XXX, INC.
By
---------------------------------- ---------------------------------
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK
By:
-------------------------------
Authorized Signatory
Countersigned:
C-3
77
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________ hereby
sells, assigns and transfers unto
-----------------------------------------------------------------
(Please print name and address of transferee)
-----------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
----------------- ----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
----------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
----------------------------------------
C-4
78
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: GlobalNet Xxxxxxxxx.xxx, Inc.
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated: ,
----------------- ----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
C-5
79
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
----------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
C-6
80
Exhibit D
Form of Right Certificate
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER JULY 11, 2011 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS OWNED BY ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) SHALL BECOME NULL AND VOID.
Right Certificate
GLOBALNET XXXXXXXXX.XXX, INC.
This certifies that _________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of July 19, 2001 (the "Rights Agreement"),
between GlobalNet Xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"),
and The Bank of New York (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Eastern time, on July 11, 2011 at the
principal corporate trust office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series B Junior Participating Preferred Stock, par value $.001 per
share (the "Preferred Shares"), of the Company, at a purchase price of $0.075
per one one-thousandth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandth of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of July 13, 2001 based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights
81
Agreement are on file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.001 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares or shares of the Company's Common Stock, par value $.001 per
share.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
D-2
82
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated: _____,____.
ATTEST: GLOBALNET XXXXXXXXX.XXX, INC.
By
------------------------------------ --------------------------------
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK
By:
---------------------------------
Authorized Officer
Countersigned:
D-3
83
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________ hereby
sells, assigns and transfers unto
-----------------------------------------------------------------
(Please print name and address of transferee)
-----------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
----------------- ----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
----------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
----------------------------------------
D-4
84
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: GlobalNet Xxxxxxxxx.xxx, Inc.
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated: ,
----------------- ----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
D-5
85
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
D-6
86
Exhibit E
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS OWNED BY ANY PERSON WHO
IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) SHALL BECOME NULL AND VOID
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On July 11, 2001, the Board of Directors of GlobalNet
Xxxxxxxxx.xxx, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.001 per share (the "Common Shares") and each outstanding share of Class A
Common Stock, par value $.001 per share (the "Class A Common Shares,") and
together with the Common Shares, the "Shares"), of the Company. The dividend is
payable on July 13, 2001 (the "Record Date") to the stockholders of record on
that date. Each Right entitles the registered holder of Common Shares to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.001 per share (the "Series A
Preferred Shares"), of the Company at a price of $0.75 per one one-hundredth of
a Series A Preferred Share (the "Series A Purchase Price"), and each registered
holder of Class A Common Shares to purchase from the Company one one-thousandth
of a share of Series B Junior Participating Preferred Stock, par value $.001 per
share (the "Series B Preferred Shares," and together with the Series A Preferred
Shares, the "Preferred Shares") of the Company at a price of $0.075 per one
one-thousandth of a Series B Preferred Share (the "Series B Purchase Price," and
together with the Series A Purchase Price, the "Purchase Price") subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of July 19, 2001 (the "Rights Agreement") between the Company
and The Bank of New York as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons have
acquired beneficial ownership of 15% (which percentage may be reduced pursuant
to the Rights Agreement) or more of the outstanding Shares of the Company (an
"Acquiring Person") or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% (which percentage may be reduced pursuant
to the Rights Agreement) or more of the outstanding Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Share certificates outstanding as of the Record Date, by
such Share certificate with a copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Shares. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new
87
Share certificates issued after the Record Date upon transfer or new issuance of
Shares will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Shares outstanding as of the
Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on July 11, 2011 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of indebtedness
or assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Series A Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
Series A Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Series A Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $1 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the Series A Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100 per share
but will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Series A Preferred Share will have 100 votes, voting together
with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Series A Preferred
Share will be entitled to receive 100 times the amount received per Common
Share. These rights are protected by customary antidilution provisions.
Because of the nature of the Series A Preferred Shares'
dividend, liquidation and voting rights, the value of the one one-hundredth
interest in a Series A Preferred Share purchasable upon exercise of each Right
should approximate the value of one Common Share.
E-2
88
The number of outstanding Rights and the number of one
one-thousandths of a Series B Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split of the Class
A Common Shares or a stock dividend on the Class A Common Shares payable in
Class A Common Shares or subdivisions, consolidations or combinations of the
Class A Common Shares occurring, in any such case, prior to the Distribution
Date.
Series B Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Series B Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $1 per share but will be
entitled to an aggregate dividend of 1000 times the dividend declared per Class
A Common Share. In the event of liquidation, the holders of the Series B
Preferred Shares will be entitled to a minimum preferential liquidation payment
of $1000 per share but will be entitled to an aggregate payment of 1000 times
the payment made per Class A Common Share. Each Series B Preferred Share will
have 1000 votes, voting together with the Class A Common Shares. Finally, in the
event of any merger, consolidation or other transaction in which Class A Common
Shares are exchanged, each Series B Preferred Share will be entitled to receive
1000 times the amount received per Class A Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Series B Preferred Shares'
dividend, liquidation and voting rights, the value of the one one-thousandth
interest in a Series B Preferred Share purchasable upon exercise of each Right
should approximate the value of one Class A Common Share.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, the Rights Agreement provides
that proper provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive (subject to adjustment) upon
exercise that number of Shares having a market value of two times the exercise
price of the Right. At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding Shares, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group, which will have become
void), in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Series A Preferred Share and one Class A Common Share, or one
one-thousandth of a Series B Preferred Share (or of a share of a class or series
of the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
The Rights Agreement provides that none of the Company's
directors or officers shall be deemed to beneficially own any Shares owned by
any other director or officer by virtue of such persons acting in their
capacities as such, including in connection with the formulation and publication
of the Board of Directors recommendation of its position, and actions taken in
furtherance thereof, with respect to an acquisition proposal relating to the
Company or a tender or exchange offer for the Shares.
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In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market value
of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are integral multiples of one one-hundredth of a Series A
Preferred Share or one one-thousandth of a Series B Preferred Share, which may,
at the election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% (which
percentage may be reduced pursuant to the Rights Agreement) or more of the
outstanding Shares, the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.001 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis with such conditions as the Board of Directors in its sole discretion may
establish.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to (a) lower certain thresholds described above to not
less than the greater of (i) the largest percentage of the outstanding Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons (other than persons not deemed an Acquiring
Person) and (ii) 10%, (b) fix a Final Expiration Date later than July 11, 2011
(c) reduce the Redemption Price or (d) increase the Purchase Price, except that
from and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights (other than the Acquiring Person and its
affiliates and associates).
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated July 19, 2001. A copy of the Rights Agreement is available free
of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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